Nifty ends below 4950…erases early gains

After a sharp decline in the past two days, the Indian markets took a breather as the benchmark indices ended on flat note on Tuesday. Overnight gains in the US and Asian markets saw the benchmark indices open with smart gains. The NSE Nifty remained above the 5000 mark in the first hour led by gains in the IT & Oil & Gas stocks. However, markets erased all the early gains as a fresh bout of selling in the Auto, PSU and Pharma stocks saw the Nifty hit a low of 4911.



The capital goods stocks continued to remain under pressure after industrial growth plunged to a 21-month low of 3.3% in July. Stocks like BHEL and L&T yet again slipped over 1% each.

Technically, the Nifty made an attempt to fill in yesterday’s falling gap; however it was unable to fill it entirely. On the downside, 4900 level seems to be the psychological support for the Nifty.

"Markets indeed bounced back in early trades, however, traders and investors continued to remain cautious ahead of August inflation and Advance Tax numbers. RBI policy meet will also play a major role in deciding the market direction in coming days. Global markets also will have their eyes and ears on a meeting of euro zone finance ministers on Friday," says Amar Ambani, Head of Research, IIFL - India Private Clients.

Finally, the BSE Sensex ended at 16,467, losing 34 points. It had earlier touched a day's high of 16,766 and a day's low of 16,374. It opened at 16,618. The NSE Nifty closed at 4,940, down 6 points.

Globally, Asian markets rebounded with Japan’s Nikkei 225 ended with positive zone after hitting a two-and-a-half-year low. South Korea’s Kospi remained closed for the Chusok holiday, while Hong Kong’s equity markets were shut Tuesday for the Mid-Autumn Festival.

European markets were trading in the negative terrain, the FTSE index was down 1%, DAX index was flat while CAC index was down 1.8%.